Corporate Finance Quiz

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Finance → Corporate Finance Quiz from 21 to 25

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21. The mixture of debt and equity, used to finance a corporation is also known as
(A) capital structure
(B) capital budgeting
(C) investing
(D) treasury

22. The present value of $100 expected in two years from today at a discount rate of 5% is
(A) $105
(B) $110.7
(C) $95
(D) $90.7

23. What will be value of $100 after two years, if the interest rate during this period is 5%?
(A) $105
(B) $107.5
(C) $110.25
(D) $95

24. Investors require higher return on
(A) levered equity
(B) unlevered equity
(C) both levered and unlevered
(D) bond equity

25. In a well-functioning capital market if the firm pays no taxes then what is better about borrowing?
(A) Borrowing is not a good idea in this case
(B) No difference who (firm or shareholders) borrows
(C) It is better that the firm borrows
(D) It is better that the shareholders borrow

ANSWERS: CORPORATE FINANCE QUIZ
21. (A) capital structure
22. (D) $90.7
23. (C) $110.25
24. (A) levered equity
25. (B) No difference who (firm or shareholders) borrows